A wānanga and a university were among 20 tertiary institutions threatened with $9 million in funding cuts because of their poor results for Māori and Pasifika students, the Tertiary Education Commission says.
The commission said one of the institutes, a private tertiary provider (PTE), opted not to provide an improvement plan and lost $36,000 from this year's government funding.
It said seven others also had funding withheld after they submitted "partially adequate" plans for improving learners' performers, while 12 of the organisations had their 2019 funding "reinstated in full" after they provided further evidence.
The penalties were part of the commission's plans to lift Māori and Pasifika achievement rates to the same level as other groups by 2022.
It said the institute that lost all of the funding the commission had threatened to withhold was a private institute with about 200 students.
"Whilst the PTE's performance was largely satisfactory, funding was withheld because of low numbers of learners progressing to higher level study," the commission said.
"Given the opportunity to respond, the PTE advised that it agreed with the decision to withhold the funds, as it was not confident it could deliver the necessary results."
The commission's deputy chief executive learner success Paora Ammunson said all the 20 institutions needed to improve.
"They were institutions that we could see in their information were struggling with Māori and Pasifika achievement and the achievement of low-income people and all the other important target groups," he said.
"We've had a strong signal from successive governments, including the existing government, that the taxpayers expect more and the communities of those students expect more, so we've been having tough conversations with our partners in the tertiary system."
Mr Ammunson said the commission was working with tertiary institutions to improve results.
He said people should not be surprised that a wānanga was among the 20 institutions that were targeted last year.
"The wānanga sector, they do work with returning students who are looking after children and all sorts of things - the people that need the most help. They've been a fantastic bridge to bring those students into the system," he said.
'Radical shift' needed
Mr Ammunson said the commission would again threaten to withhold funding from institutions later this year when it examined institutions' results.
He said the commission was encouraging tertiary institutions to learn from the example of Georgia State University in Atlanta in the US, which had eliminated disparities between different ethnic groups over a period of about nine years.
It had achieved that by monitoring student data to spot factors most strongly linked to failure, he said.
Commission papers released to RNZ under the Official Information Act said the goal of equity by 2022 would require a "radical shift".
"We've been open about the fact that this is an aspirational target. The shifts to achieve parity in some parts of the system are huge: we need to see qualification completion rate shifts of up to 20 percent in some TEOs," a document said.
It said the commission had researched effective ways of raising achievement and was partnering with the University of Waikato, Waikato Institute of Technology and Te Wānanga o Raukawa.
Massey University said it was last year threatened with loss of funding.
A commission document said the degree completion rate for Pasifika students at Massey last year was 19.4 percent. It said the completion rate for Pasifika students across the eight universities was 19.7 percent points lower than for non-Māori and non-Pasifika students.
"Massey is now undertaking work to understand its data, review its programmes with a view to addressing parity and has the support and drive of its leadership team," a commission document said.
Te Whare Wānanga o Awanuiārangi chief executive Wiremu Doherty said his institute was targeted last year because of achievement rates in one of its programmes.
"We worked closely with the TEC, who agreed we had the appropriate systems and processes in place to increase performance levels in the programme moving forward, and no funding was withheld," he said.
Prof Doherty said course completion rates in the programme had increased by nearly ten percent from 2014 to 2017.
The commission said six polytechnics were among the 20 institutes threatened with funding cuts, but only four identified themselves to RNZ.
They were Ucol, Waikato, Whitireia and the Open Polytechnic.
The remaining institutes denied they were warned by TEC last year that they might lose funding.
Waikato Institute of Technology was now working with the commission to test new ways of tackling underachievement and its acting chief executive David Christiansen said the threat of withholding funding showed the commission was serious.
"At the time, I must admit, my first reaction was 'well, that's silly, you've penalised an institution most which can't afford to lose that money'," he said.
But Mr Christiansen said he later learned the commission was doing a lot of work to show institutions how they could improve their results and Wintec was now working with the commission to improve its results by close monitoring to spot when students were at risk of dropping out.
"It's great because they're showing real leadership on it and real commitment to actually closing the gap," he said.
Independent Tertiary Education New Zealand is a group representing most private tertiary institutions. Its president Craig Musson said student pass rates were not entirely in their control.
"The funding bodies have to realise that it's not just one-way. It's not just up to the provider to do this. There's a lot of factors that come into it. There's families, there's the students themselves, there's the schools, there's a lot of things that are happening that they all have to fit together so that the achievements can go from where they are now to keep climbing," he said.
"We certainly realise that we've got to reach higher achievement outcomes and the majority of providers are working towards that."